Callahan - The cheating culture: why more Americans are doing wrong to get ahead

Copyright 2004 by David Callahan

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from the publisher.

For information about permission to reproduce selections from this book, write to or to Permissions, Houghton Mifflin Harcourt Publishing Company, 3 Park Avenue, 19th Floor, New York, New York 10016.

www.hmhco.com

The Library of Congress has cataloged the print edition as follows:
Callahan, David, 1965
The cheating culture: why more Americans are doing wrong to get ahead / David Callahan.1st ed.
p. cm.

Includes bibliographical references and index.

ISBN 0-15-101018-8

1. Business ethics. 2. Professional ethics. 3. Social ethics. 4. United StatesMoral conditions. I. Title.

HF5387.C334 2004
174dc22 2003015529

e ISBN 978-0-15-603557-6
v2.0317

My friend Peter went through a shoplifting phase a few years back. His thefts reflected his tastes$40 bottles of Bordeaux, for exampleand though Peter showed no signs of kleptomania, his friends agreed that he must have mental problems. Why else would a normal adult be shoplifting?

Last April, my friend Max filed taxes in Connecticut, where he used to live, even though he now resides in New York City. Dodging the citys killer taxes saved him about $3,000. Did anyone think Max was disturbed? Hardly. His friends thought he was smart to keep his legal address in Connecticut.

Petty shoplifting is a misdemeanor. Tax evasion is a felony that can yield prison time. If anyone has a screw loose, its really Max, not Peter. Right? Well, yes and no. And this funny dichotomy says a lot about morality in America these days, as Ive learned while writing this book.

In the fall of 2001, when Enron collapsed into a heap of debts and lawsuits, I was working on a history of the Harvard Business School class of 1949. Most of its members are now in their late seventies, and many ran big companies in their day. When I asked them about the corporate scandals, theyd shake their heads in disgustdisgust at the bloated pay packages, the gilded perks, and most of all at the pervasive lying by CEOs. Its about values, the 49ers said, in trying to explain what went wrong in the executive suites of Enron, Tyco, and so many other companies. Todays business values normalize felonious behavior; yesterdays values were less tolerant of such behavior. To the 49ers, the corporate scandals were almost that simple.

This was not reassuring to hear. It meant that, sure, we could pass stiffer laws and get new watchdogs. We could toss CEOs in prison and throw away the key. But such a crackdown would only get America so far as long as business leaders were greedy, self-centered, and materialistic.

As I mulled over these questions of values, I began noticing other stories in the news about cheating. The historian Stephen Ambrose was enmeshed in a plagiarism scandal; Princetons admissions office was in trouble for breaking into Yales computer; Alabamas football team was put on probation for recruitment violations; the IRS reported that tax evasion was up sharply. There was even a story about cheating on the hallowed American ground of state fairs, as contestants misrepresented the real weight of livestock to win cash prizes. I wondered, whats going on here? Why so much cheating? Is there more cheating now than in the past, as it seems? And is it all connected?

To answer these questions, I set out to explore what changes in American life might be leading us to cheat more. I cast a wide net in my research, looking at different professions, our government and legal system, the economy and culture, and peoples values. Ive drawn on government reports and statistics, studies by social scientists, public opinion polls, histories of different professions, and a mountain of journalistic investigations of scandals and cheating incidents. My research assistants and I also conducted over eighty interviews with people involved in the cheating culture in one way or another: parents, students, teachers, coaches, athletes, experts in business ethics, stock analysts, lawyers, accountants, doctors, and law enforcement officials. These interviews were immensely helpful, especially those where cheaters talked openly about their motives. For obvious reasons, many of the people interviewed did not want their names used.

This is a dark book in some ways. An increase in cheating reflects deep anxiety and insecurity in America nowadays, desperation even, as well as arrogance among the rich and cynicism among ordinary people. Many of the stories that follow are very troubling; some are tragic. And yet there is real hope here, too. Much cheating, as well see, can be traced to conditions that we have the power to changefrom how much security our economy affords people, to how well government polices business, to the ethical climate in our schools. We can make different choices in the years ahead, and I suggest a number of such choices in my concluding chapter.

I owe a large debt of gratitude to those who helped make this book possible. In the back of the book, Ive listed all the people who shared their expertise and experiences. Here, Id like to thank those who worked closest with me in developing the book: Andrea Schulz, my editor at Harcourt, who brought extraordinary talent to the task of improving successive drafts of the manuscript; Andrew Stuart, my literary agent; LeeAnna Keith and Carolyn Rendell, my research assistants; and my colleagues at Demos, especially Miles Rapoport, who has been unfailingly supportive of this project. Also, a special thanks to Wendy Paris for her encouragement and thoughtful comments on the manuscriptand for her patience and love.

David Callahan
New York
July 2003

CHAPTER ONE

I played a lot of Monopoly growing up. Like most players of the game, I loved drawing a yellow Community Chest card and discovering a bank error in my favorCollect $200! It never occurred to me not to take the cash. After all, banks have plenty of money and if one makes an error in your favor, why argue?

I havent played Monopoly in twenty years, but Id still take the $200 today. And what if a real bank made an error in my favor? That would be a tougher dilemma.

Such things do happen.

Just to the east of where the Twin Towers once stood is a twenty-six-story office building that houses the Municipal Credit Union of New York City. The credit union has 300,000 membersfederal, state, and city government employeesand over $1 billion in assets. Although a number of buildings near Ground Zero sustained serious damage when the towers came down, the MCUs glass-and-steel building on Cortlandt Street survived unscathed. However, the credit union did suffer a major computer failure that severed its link to the New York Cash Exchange (NYCE), the largest network of automatic teller machines in the Northeast.

The network managers at NYCE quickly detected the severed link. The problem meant that while credit union members could withdraw money at cash machines, NYCE couldnt immediately track these transactions or prevent members from overdrawing their accounts. NYCE leaders managed to get through to the credit union staff, even though the organization was in chaos. They posed the following choice: With just a few strokes on a computer keyboard, NYCE could cut off all cash withdrawals until the severed link was restoredwhich could take several weeksor NYCE could let the cash keep flowing and sort out the withdrawal records later. Theoretically, anyone with a credit union ATM card could take out as much money as they wanted. The credit union would have to assume that risk. What did it want to do?